Prescott's 'Big Bang'

Published Sat 12 Feb 2000

Issue No. 1683

Prescott's 'Big Bang'

Labour's scheme to end council housing

By Paul Mcgarr

THE NEW Labour government is going to privatise every council home in Britain. In an operation government ministers are dubbing the "Big Bang", New Labour wants to force councils to hand all their 3.2 million homes over to private landlords by the end of the decade. Deputy prime minister John Prescott plans to set annual targets for privatisation. This year alone dozens of councils are set to try and privatise almost 300,000 homes.

In major cities like Manchester, Birmingham, Glasgow and others, Labour councils plan to hand their entire council housing stock to private companies. This astonishing assault is one of the biggest ever privatisation schemes, one that even the Tories never dreamed of. The fight is on for the very future of council housing-which is one of the key pillars of the welfare state. The assault on council housing began under the Tories.

Margaret Thatcher starved local councils of the funds needed to build, repair and renovate homes. The Tories also began to push councils to hand over homes to private housing companies. In ten years they managed to transfer around 250,000 homes from local councils to private companies. Leading Labour figures denounced the Tory policy. Housing spokesman Nick Raynsford said three years ago that the privatisations were "the last desperate convulsions of a dying government. Simply transferring stock from one landlord to another does nothing to make up the shortage of resources." Now Raynsford is a New Labour housing minister. He and his boss, deputy prime minister John Prescott, have already outdone the Tories in their zeal for privatisation. In under three years New Labour has presided over the privatisation of more homes than the Tories did in all their years in office. The Inside Housing magazine says the government is determined to step up the pace and wants all council housing privatised in the next ten years.

A taste of the future

A TASTE of what is in store in many major cities in the coming months, and of how resistance can be built, came in Manchester last week. The council produced a report outlining plans to hand over all 68,000 council homes in the city to private housing companies over the next three years. Council housing offices and repairs centres will be shut, and jobs will be lost.

Tenants and trade unionists organised a swift response. In just four days they pulled together an excellent meeting of over 40 tenants' groups from across the city. A press conference and protest followed. Council leaders were forced to say the plans were only an option and that there would be "full consultation".

The council will still try and push ahead, but the response last week shows how it can be beaten.

COUNCILS AND the government say their plans are not really privatisation. They say that housing associations or new, specially created housing companies will run homes. Rents will be limited for some five years after the transfer to the new company. But all the new companies will raise money from the City. The City money men want their interest payments-their profit-which is the only reason they will put any money in. Once the "guarantee" period is over all the private housing companies will jack rents up massively. Under the privatisations all tenants will also lose their existing "secure" tenancies. The government's own official watchdog, the Housing Corporation, last year studied privatisation schemes that had already gone through. It found that "relet" rents were an average 16 percent higher than those for existing tenants in identical homes.

Daylight robbery

THE GOVERNMENT and New Labour councils argue that there is no alternative to privatisation. They point out that because of the damage done in the Tory years some �20 billion would be needed to repair and renovate council homes in Britain. They say the money simply is not there in the public purse. They claim that the only way to get repairs and building projects done is to look to private finance.

New Labour hopes that tenants desperate to see something done about their homes will fall for this argument and vote in ballots to accept privatisation. In fact, not only is the money there in the public purse, but the government is spending it on promoting the privatisations it says are needed because of the lack of public money! Many councils have run up large debts in their housing budgets. City financiers and private housing companies do not want to take these debts over. So the government has set aside �12 billion to write off councils' housing debts, but only if they hand the homes to private companies. The government also has another �10 billion of public money in its housing budget as a direct result of what campaigners have dubbed "daylight robbery". Under complicated rules a portion of the rent paid by all council tenants is siphoned off by central government to pay for housing benefit.

New Labour ministers acknowledge this is a rip off as housing benefit should be funded out of general taxation, not a special tax levied on council tenants. This "daylight robbery" has resulted in a �10 bil lion pot of money being accumulated. From just these two areas alone the government could easily find the �20 billion of public money needed to allow local councils to do the work needed on council homes. Of course much more could, and should, be done. If a tiny amount of the billions wasted on projects like Trident nuclear missiles was pumped into local councils they could build new, decent and affordable housing for all.

Privatisations can be stopped

OVER THE last two years New Labour's drive to privatise council homes has provoked resistance. In some areas tenants have organised to fight the privateers. In Sandwell, Cambridge, Camden, Tower Hamlets and other areas tenants have delivered resounding no votes in ballots on privatisation. Out of such campaigns has emerged a national grouping-Defend Council Housing. It has pulled together local campaigners. In many areas the campaigns have involved local Labour Party members, and even councillors, disgusted at the attack on council housing. Defend Council Housing last week launched a national campaign in response to the government's "Big Bang" plans. The campaign has won the backing of TAROE (Tenants and Residents Organisation of England)-the official body representing tenants. It has also won the backing of UCATT, the building workers' union, as well as many branches of the UNISON and GMB unions.